Panorama image refers to an image captured with an extended field of view in one or more directions (for example, horizontally and/or vertically). The extended field of view is a wide-angle representation beyond that captured by an image sensor. For example, an image that presents a field of view approaching or greater than that of the human eye can be termed as a panorama image. Various devices like mobile phones and personal digital assistants (PDA) are now being increasingly configured with panorama image/video capture tools, such as a camera, thereby facilitating easy capture of the panorama images/videos. Typically, a panorama image may be constructed by capturing a sequence of images such that a pair of adjacent images may have portions that are common between them. For example, the edge portions may be common between the pair of the adjacent images. While forming the panorama image of the captured images, such common portions (hereinafter referred to as overlapping regions) are processed and blended so that a smooth panorama image may be obtained.